The Chief Manager, Punjab National Bank, Patna v. The Commissioner Of Income Tax (Tds), Central Revenue Building, Bir Chand Patel Path, Patna

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.4079 of 2013 ====================================================== The Chief Manager, Punjab National Bank, Patna through its Chief Manager, Shri Arbind Kumar, aged 58 years, S/o Late R.N.Singh, resident of 125-B, Road No. 2, Rajendra Nagar, Patna 800016, P.O.- Arya Kumar Road & P.S.- Kadam Kuan, District-Patna. .... .... Petitioner Versus 1.The Commissioner of Income Tax (TDS), Central Revenue Building, Bir Chand Patel Path, Patna. 2.The Assistant Commissioner of Income Tax (TDS), Central Revenue Building, Bir Chand Patel Path, Patna. 3.The Union of India through the Secretary, Department of Revenue, Ministry of Finance, Government of India, Central Secretariat, North Block, New Delhi- 110001. .... .... Respondents ====================================================== Appearance :For the Petitioner : Mr. Ajay Kumar Rastogi, Advocate. Mr. Manish Rastogi, Advocate. For the Respondents : Mr. Harshwardhan Prasad, Sr. Standing Counsel. Mrs. Archana Sinha, Jr. S.C. ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE ASHWANI KUMAR SINGHORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) This Petition under Article 226 of the Constitution has been filed by the assessee-Punjab National Bank, Patna (hereinafter referred to as „the Bank‟) against the revisional order dated 13[th] March 2012 made by the Commissioner of Income Tax (TDS), Patna in exercise of power conferred by Section 264 of the Income tax Act, 1961 (hereinafter referred to as „the Act‟). 9 20-09-2013 Under the order of assessment, made in exercise of power conferred by Section 201(1) of the Act, the Assistant Commissioner of Income Tax (TDS) held, inter alia, that the Bank was in default in respect of deducting the tax at source from the amount of interest paid to the Bihar Industrial Area Development Authority (hereinafter referred to as „the BIADA‟) and in respect of the interest paid to the Infrastructure Development Authority (hereinafter referred to as „the IDA‟) for the financial year 2008-09. Pursuant to the said finding, the Assistant Commissioner of Income Tax (TDS) directed initiation of a penalty proceeding under Section 271C of the Act for the said default. The said order has been upheld by the Commissioner of Income Tax (TDS) under the aforesaid revisional order dated 13[th]March 2012. Feeling aggrieved, the Bank has preferred this writ petition. Learned advocate Mr. Ajay Kumar Rastogi has appeared for the Bank. He has submitted that the Bank was restrained under the order of restraint made by this Court against the deduction of tax at source in respect of the aforesaid two authorities. The Bank, therefore, cannot be held guilty of violation of any provision of the Act as alleged by the department. In support thereof, Mr. Rastogi has relied upon the order dated 30[th]March 2009 made by a Bench of this Court (Coram: Mr. J.B.Koshy, CJ & Dr. Ravi Ranjan, J) in CWJC No. 3759 of 2009. Under the said order, this Court directed, “we grant stay of the impugned order for three months and the respondent Bank shall not deduct the TDS.” It is indisputable that the Bank was one of the respondents in the said writ petition and the above referred 3 Sujit/- restraint order applied to the Bank also. In our view, the Bank having been restrained by this Court as aforesaid, cannot be held to be guilty of non-compliance with the statutory provisions of the Act as has been done by the authorities below. The Commissioner of Income Tax (TDS) has erred in holding, “In absence of any certificate of no deduction/lower deduction of tax having been furnished by the two authorities (BIADA & IDA) for F.Y. 2008-09, the assessee bank was under legal obligation to deduct tax at source on payment/credit of interest on FDR’s during F.Y. 2008-09”. It is indisputable that the Bank was one of the respondents in the said writ petition and the above referred 3 Sujit/- restraint order applied to the Bank also. In our view, the Bank having been restrained by this Court as aforesaid, cannot be held to be guilty of non-compliance with the statutory provisions of the Act as has been done by the authorities below. The Commissioner of Income Tax (TDS) has erred in holding, “In absence of any certificate of no deduction/lower deduction of tax having been furnished by the two authorities (BIADA & IDA) for F.Y. 2008-09, the assessee bank was under legal obligation to deduct tax at source on payment/credit of interest on FDR’s during F.Y. 2008-09”. It is apparent that the authorities below have failed to notice that the Bank was a party to the above referred CWJC No. 3759 of 2009 and the above referred order of restraint was directed against the Bank. We may note here that except the order in respect of the above referred authorities (BIADA & IDA), the challenge to the rest of the order is not pressed before us. For the aforesaid reasons, the Petition is allowed. The impugned order dated 13[th] March 2012 made by the Commissioner of Income Tax (TDS), Patna in so far as the order in respect of the BIADA & IDA and the order for initiation of penalty proceeding under Section 271C of the Act made by the Assistant Commissioner of Income Tax (TDS), Patna is upheld, is quashed and set aside. Legal consequence shall follow. (R.M. Doshit, CJ) (Ashwani Kumar Singh, J)